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Moldova

Moldova country brief

Overview

Moldova is a landlocked country in Eastern Europe, located between Romania to the west and Ukraine to the north, east and south. Moldova emerged as an independent republic in 1991 following the collapse of the Soviet Union. The majority of Moldova's 3.6 million citizens (2012 est.) are of Romanian descent, and the two countries share a common cultural heritage. The official language is Moldovan. The city of Chişinău is Moldova's capital.

Moldova celebrates its national day on 27 August.

Political overview

Moldova is a republic with a President, His Excellency Nicolae Timofti, as its Head of State and a Prime Minister, His Excellency Chiril Gaburici, as its Head of Government. The parliament is unicameral, comprising 101 seats, to which members are elected from party lists on a proportional representation basis. The President is directly elected by Parliament for a four-year term. The President, in turn, appoints the Prime Minister with the approval of Parliament.

Moldova declared its independence from the Soviet Union on 27 August 1991.

Moldova has actively participated in the EU's European Neighbourhood Policy. In February 2012, the EU launched Free Trade Agreement negotiations with Moldova. In April 2014, the EU lifted visa restrictions on Moldova, allowing its citizens to travel freely throughout the EU Schengen passport-free area. In June 2014, Moldova signed an Association Agreement with the EU which serves to deepen political, economic and trade relations.

Moldova is a member of a number of international organisations including the United Nations, International Monetary Fund (IMF), World Bank World Trade Organisation (WTO), Organization for Security and Co-operation in Europe (OSCE) and the European Bank for Reconstruction and Development. Moldova is a member of NATO’s Partnership for Peace and the EU’s Eastern Partnership along with Armenia, Azerbaijan, Belarus, Georgia, and Ukraine.

Transnistria (Transdniestr) dispute

In September 1990 (that is, before Moldova’s independence from the Soviet Union), Transnistria, the area east of the Dniester river, declared itself an independent state. This eventually led to a brief civil war in early 1992. A ceasefire agreement was later signed in July 1992. Transnistrian separatists established their own administration and Russia deployed peacekeeping troops into the region, which remain there. The region has been under OSCE supervision since 1993.

A Memorandum of Understanding guaranteeing a degree of autonomy for the region was signed in 1997. The Memorandum of Understanding offers a large degree of autonomy, but Transnistria demands independence. Transnistria is internationally recognised as part of Moldova, but Chişinău does not exercise control over the territory. In February 2011, OSCE-led negotiations between Moldova and Transnistria recommenced after a six-year hiatus. In March 2014, continuing a long-running Transnistrian practice, Transnistria once more appealed to Russia to annex the region, following Russia’s actions in the Ukrainian territory of Crimea.

Economic overview

Moldova has one of the smallest economies in Europe with significant foreign debt and high unemployment. The economy is based on agriculture, including horticulture, viticulture and tobacco production. The country does not have any significant known mineral deposits and relies heavily on Russian energy.

Economic reform measures have included the introduction of a stable convertible currency and real interest rates; the end of price fixing and export controls; the privatisation of land; and the eradication of preferential deals for inefficient state-owned enterprises. The continuing reliance on agriculture, however, means that Moldova's economy is extremely vulnerable to adverse weather conditions and fluctuations in international markets.

Moldova’s economic growth in recent years has been mixed. It experienced strong growth in 2010 and 2011 (about seven per cent), but experienced a dramatic slowdown in 2012 – where the economy contracted by -0.7 per cent. The Moldovan economy then recovered dramatically in 2013, growing by 8.9 per cent and is estimated to have grown at 1.8 per cent in 2014.

Bilateral relationship

Moldova has no resident representation in Australia. Australia's Ambassador in Moscow is accredited to Moldova.

Australia's trade and investment relationship with Moldova is modest. Total two-way merchandise trade in 2014 was A$3.37 million. Australia’s merchandise exports to Moldova were valued at A$1.96 million in 2014 and included milk, cream, whey and yoghurt, and telecom equipment and parts and medical instruments (including veterinary). Merchandise imports from Moldova were valued at A$1.37 million in 2014 and included clothing, alcoholic beverages and travel goods.